the price of bitcoin It topped $100,000 for the first time on Wednesday as the world’s biggest cryptocurrency extended the rally it had started. the elections of former President Donald Trump.
Bitcoin is up more than 40% since Election Day, when voters chose their candidate seen as it is friendly to digital currency.
These gains have far outpaced the stock market. SThe &P 500 is up about 2.4% over that period, while the tech-heavy Nasdaq is up 2.6%.
On the campaign trail, Trump he swore to strengthen the cryptocurrency sector and ease regulations imposed by the Biden administration. Trump promised to establish the federal government’s first National Strategic Bitcoin Reserve.
Trump said he would replace Securities and Exchange Commission Chairman Gary Gensler, who is disliked by many crypto proponents for what they perceive as his strong-willed approach to crypto regulation.
Gensler announced that he plans to resign on January 20, 2025, the date of Trump’s inauguration.
The post-election euphoria has lifted other parts of the crypto sector. Ethereum, the second largest cryptocurrency, is up 27%. Unknown dogecoin is up about 140%, while litecoin is up 35%.
Shares of Coinbase, a leading crypto-trading platform, have risen more than 70% since Trump’s re-election.
The growth of the past few weeks represents a significant turnaround for the crypto industry. The sector entered this year bruised after a series of high-profile collapses and corporate scandals.
FTX, the multi-billion dollar cryptocurrency exchange founded by Sam Bankman-Fried, he fell in November 2022. The implosion set off a 17-month legal saga in which Bankman-Fried was convicted of fraud. In April, Bankman-Fried was sentenced to 25 years in prison.
Changpeng Zhao, the founder and former CEO of leading cryptocurrency exchange Binance, was sentenced to four months in prison in April after pleading guilty to charges that his platform enabled illegal financial activity.
Republican President and former President Donald Trump gestures during the Bitcoin 2024 event in Nashville, Tennessee on July 27, 2024.
Kevin Wurm/Reuters, FILE
Trump’s re-election is the latest in a series of positive developments that have boosted cryptocurrency this year.
These gains have been driven in part by the US approval bitcoin ETFs, or exchange-traded funds, in January. Bitcoin ETFs allow investors to buy an asset that tracks the price movement of bitcoin, avoiding the inconvenience and risk of buying the cryptocurrency itself.
Last month, options on BlackRock’s popular iShares Bitcoin Trust ETF (IBIT) became available for trading on the Nasdaq. Offering a new avenue for Bitcoin investors, options allow individuals to commit to buying or selling an ETF at a specific price for a specific date. While these investments usually come with added risk, they can also pay off big.
IBIT rose 1% on Friday to hit a record near $56.
Bryan Armour, research director of passive strategies at financial firm Morningstar, attributed the recent surge in crypto to investors’ anticipation of a Trump-friendly policy, as well as news of options available for bitcoin ETFs.
However, the performance of cryptocurrencies, including bitcoin, has been volatile, Armor added. The price of bitcoin could fall, especially if Trump has difficulty fulfilling his campaign promises, he said.
“As long as the narrative remains positive, there’s always room for growth,” Armor told ABC News before bitcoin hit $100,000. “I also believe that campaign promises are not always fulfilled.”
“It’s still a very volatile asset,” Armor added.
